There are many benefits to dealing away with debt within a short period, the most important being less stress and more money to spend on leisure, groceries, and home improvement.

1. Create a Budget

It is a good idea to create a budget to find out where your hard-earned money is going. The first thing to do is to list your combined income, including wages and salaries, bonuses, commissions, rent, and other sources of additional income you may have. Then make a list of your ongoing expenses such as mortgage payments or rent, groceries, cleaning detergents and cosmetics, daycare, clothing, and utilities (gas, phone, internet, water, etc.). Compare your expenses and income to find out if you spend more than you can afford.

2. Cut Back on Some of Your Expenses

Now that you have a budget, it is time to discuss different ways to cut on some expenses and use the money to repay any outstanding balances. If you spend too much on dining, for example, think of preparing homemade meals for your family. There are other ways to save on monthly or ongoing expenses, and one is to save money on transportation. You can do this in different ways – sell your vehicle, use public transportation (e.g. subway, bus, train), car pool to work, etc. In addition, you can save on debt in at least several ways by consolidating student or consumer loans, refinancing, and transferring high interest balances. There are automatic debt repayment plans as well.

3. Look for Additional Sources of Income

If you are unemployed or underemployed or have a seasonal job, then you may want to look for additional sources of income. One option is to look for part-time employment or a second job to increase your income. There are other ways to make money in the form of passive income. One is to open a high interest savings account to earn a higher yield. Another option is to invest in other low-risk products such as certificates of deposit or government securities. This is provided that you have some free cash on your hands.

4. Increase Your Payments

This is one way to save on interest charges and repay outstanding balances over a shorter period for a debt-free future. Always try to pay more than the minimum, especially on high-interest credit cards. If you have a low-interest card, you may want to use it to make payments. Note that if you only pay the minimum on a high-interest account, charges accumulate over time, and you are more likely to be late on your payments. Late and missed payments can have a negative impact on your score and future ability to borrow.

5. Reduce your interest rate

There are several ways to reduce the interest rate, and the most obvious one is to shop around for cards with low interest rates. In fact, some financial institutions actually offer such cards and advertise very low rates of about 6 – 8 percent. This is the standard rate provided that you make on-time payments. Penalty rates are usually significantly higher and apply to late and missed payments. Another option is to apply for a balance transfer card. If you have high-interest cards, then you pay a lot in charges, especially if you only pay the minimum each month. If you use a card with a high interest rate, then you should always try to cover the full amount. Otherwise it is better to use a low-interest product or transfer your existing balances to a card with a promotional period and a low rate. There are good balance transfer cards with long promo periods of 12 – 18 months and zero or a very low rate over the intro period. A third option is to contact your issuer and try to negotiate a lower rate. If you are a regular customer with a steady payment history and healthy credit score, they may actually agree to do this to keep you in.

6. Use Cash or Debit

This is a good idea, especially if you have multiple card accounts and a lot of debt to sort out. Either use your debit card to make payments online and in-store or carry cash with you. You may want to take small amounts with you to avoid the temptation to make frivolous purchases and overspend.

Conclusion

As you can see, there are many ways to reduce your debt load by Thanksgiving, from developing a budget and finding additional sources of income to trying to reduce the interest rate and using cash. If you have multiple debts, including consumer loans, mortgages, and credit cards, you may want to develop a repayment plan to get rid of debt faster.

Balance transfer cards are often used to move high interest balances to a card with a low interest rate. This helps save on interest and pay down existing balances over a shorter period of time. Also known as debt consolidation, borrowers with multiple high interest cards often transfer their balances elsewhere to benefit from a zero or low interest introductory rate.

I Get a Lot of Balance Transfer Promotions in the Mail. What Happens after the Introductory Period Expires?

Many issuers advertise balance transfer cards by mail as a way to attract new clients and increase their customer base. When the introductory period expires, the standard rate applies to all purchases charged on the card. The standard rate varies from issuer to issuer and can be as high as 30 percent. Usually financial institutions offer rates ranging from 11.99 to 21.99 percent, based on your credit profile. Applicants with a history of missing or late payments are usually offered high standard rates.

When the introductory period is over, interest payments increase, and it is a good idea to pay the full amount. If you only pay the minimum, interest charges accumulate with time.

Is Balance Transfer for Me?

This depends on many factors, including interest charges on all cards held, penalty interest, credit limit, grace period, income level, and more. Look at different offers, rates, transfer fees, and criteria for approval. Some financial institutions only accept applications from clients with stellar credit while others have more lenient requirements. In addition to your credit profile, consider how many balances you have, whether late or missing payments are an issue, and if a low interest card with an intro period will help you pay down your card debt. This depends on the length of the introductory period and the amounts owned. As a rule, a balance transfer is a good choice if you find it difficult to keep track of due dates and monthly payments and miss payments as a result. This can be a problem, especially if you have a fair or poor credit score. Your score is likely to suffer.

Transferring existing balances also makes sense if you hold multiple cards and pay the minimum only. In this case you pay a lot in interest charges which makes card debt expensive. Whether this is a good option also depends on the types of cards held. Department store cards, for example, charge higher interest rates. Finally, you may want to consider your financial situation and short- and long-term goals and whether alternative solutions make more sense. Depending on the types of debt held, there are alternatives such as credit counseling, negotiation with creditors, and individual voluntary arrangement. Other alternatives include debt restructuring, bankruptcy (as a last resort), and formal proposal. A balance transfer is a good choice if you mostly have credit card debt (i.e. revolving credit). In any case, ask for charges such as transaction fees, the nominal rate, the teaser rate, and others. Most banks offer a teaser rate over a period of 6 to 15 months.

How to Find a Low Interest Balance Transfer Credit Card

Check with different issuers, including online banks and brick-and-mortar banks, caisses populaires, unions, and credit card companies. If you are a union member, this may be a good starting point. Credit unions usually offer cards with affordable rates and are more willing to work with borrowers with average or compromised credit. Many issuers offer cards by Discover, MasterCard, American Express, and Visa. Some financial establishments also offer cards with low intro rates and perks such as cash back, a long introductory period of 18 months, no annual fee or annual fee waivers, and many others. Ask whether they can offer a potential savings estimate provided that you make on-time payments. Some issuers also offer one-time bonuses, and holders enjoy additional savings. To find a low interest card, also check with major banks such as MBNA, Scotia Bank, CIBC, and others. You may also ask your family, colleagues, and friends about their credit card experience.

Scotiabank offers a Visa card with a low intro rate of 3.99 percent. The best part is that the bank charges no balance transfer fees. The low rate applies during the introductory period (6 months). The card features perks and benefits such as car rental discounts, optional card protection, telephone banking, and more. The fact that there is no annual fee means that borrowers benefit from additional savings. Applicants are free to order supplementary cards.

This is another good balance transfer option for borrowers who use high interest cards. MBNA offers a longer introductory period of 12 months and zero introductory interest on balance transfers. While this card features no rewards, customers are offered the opportunity to save on interest charges over a longer period. MBNA also features optional coverage in case of accidental death, critical illness, disability, and involuntary unemployment. Canadian residents who are of legal age and have a Canadian credit profile meet the eligibility requirements.

President’s Choice Financial features a balance transfer card that offers the opportunity to earn bonus points for travel services and at participating stores. The card offers standard benefits such as purchase assurance and extended warranty and optional extras and perks such as account balance protection in case of involuntary job loss and disability. One of the main benefits for customers is the low balance transfer rate of just 0.97 percent over a period of 6 months. Customers also benefit from flexible and convenient online banking that allows them to view e-statements and their account summary, check available credit and existing balance, and more.